Sandy put icing on the cake for solid year in N.J. hotels

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February 13, 2013 at 2:06 PM

(Stockton College)

Months before Hurricane Sandy boosted hotel and motel occupancy rates by displacing scores of homeowners and bringing hordes of construction workers and aid officials into New Jersey, the state's lodging industry was on pace to break occupancy records set prior to the recession, according to an analysis of state fees and municipal taxes collected from the properties throughout 2012.

According to data published by Treasury, more than $87 million in state hotel and motel occupancy fees was collected in 2012, compared to $80 million collected in 2011 and $75 million collected in 2010.

A Treasury spokesman said the state occupancy fee for hotel and motels remained unchanged at 7 percent between 2010 and 2012, and municipalities held their taxes between 1 percent and 3 percent throughout that time period, as well. That means the improvement in occupancy revenue is attributed to increased bookings and higher room prices spurred by stronger demand, a local lodging industry expert said.

"The one silver lining to Sandy, as far as the lodging industry is concerned, is the storm finished off the cake by putting some icing on it — but the key thing is there was already cake on the table before it hit," said Brian Tyrrell, an associate professor of hospitality and tourism management at Stockton College. "Without a doubt, the state's lodging industry is the strongest it has ever been since 2005, since the next best 12-month period on record is $83.34 million in occupancy fees collected between August 2007 and August 2008."

However, Tyrrell said there was a completely different picture in Mercer County leading up to the hurricane in late October. Occupancy fees and tax revenue stemming from the county fell nearly 24 percent in the third quarter of 2012 from the previous year, a result of the shrinking state government in Trenton. FEMA representatives, construction workers and displaced residents in Monmouth County filled empty rooms at those inland hotel and motel properties, propping up collections in the fourth quarter, but as shoreline counties continue to rebuild from Sandy, Tyrrell said the Trenton area's lodging industry may resume its previous downward slope — unless it attracts more businesses with sustainable travel needs to offset declining interaction with the Statehouse.

Aside from Mercer County's substantial pre-Sandy slip, North Jersey counties and the four other Central Jersey counties recorded either modest inclines or declines in occupancy tax and fee collections in the third quarter of 2012, though South Jersey counties consistently expanded that revenue stream throughout the year, which Tyrrell said indicates a steady uptick in leisure travel to those areas.

"Considering gambling is still on a decline, double-digit increases in every quarter (of 2012) for Atlantic County was a great trend to see. And a lot of that has to do with the additional money available to market Atlantic City, which is expanding the visitor base to folks who certainly won't gamble, but who will book hotel rooms and purchase hotel meals," Tyrrell said. "Now, in light of Sandy — which impacted the Jersey Shore physically and from an image perception perspective — the state needs to provide additional marketing funding, to make sure travelers know those areas are ready to handle their business and welcome them as visitors going into the summer."